Mortgage Originators: Appraisals a Huge Concern

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Early results released Aug. 20 from the 2012 Loan Originator Survey conducted by Mortgage Daily revealed that the real estate appraisal process is considered one of the most frustrating issues for mortgage loan originators. Respondents also cited the Dodd-Frank Act as having a big impact on their business.

The results are only preliminary because the survey is ongoing and won’t officially close until Sept. 15. Respondents must be mortgage originators registered in the Nationwide Mortgage Licensing System and Registry.

The survey showed strong opposition to current appraisal requirements, with many respondents having made negative comments about today’s appraisal environment. Most respondents reported having lost deals because of low appraisals, and several expressed concern for consumers who are being impacted by the current environment.

More than a quarter of the mortgage originators noted that their income has declined because of the real estate appraisal requirements implemented since the mortgage crisis began.

When asked about Dodd-Frank, many respondents said that their commissions have been mostly unaffected by the legislation. More than a quarter indicated that their income has declined at least 25 percent as a result of the law while more than a fifth said that their income has risen as a result.

Other survey results: a third of the respondents said they rely on realtors as their primary source of new business, more than half use an Apple smartphone and nearly half use a tablet device (for most it’s an iPad) but they don’t use it to perform origination functions.

Interested and qualified mortgage originators can participate in the survey through mid-Sept.

~ Source Appraisal Institute
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4 Responses

  1. TD says:

    And again….someone with a financial interest in closing “the deal” expresses frustration with appraisers. I believe there should be a mandatory CE Class for loan originators that will educate them about the appraisal process, the appraisers role as a neutral party and the realtor’s role. Maybe that would help them understand that they need to STOP basing their lending decisions on what a realtor says.

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  2. Of course they are pissed, their income is at at an all time low and many lenders won’t even talk to the Broker.
    What I see in my market is seller concessions killing the deal not the appraisal.
    Realtor and homeowner agree to list at $ 150,000. then they add a $ 8,500. concession, How did the value of the property INCREASE $ 8,500. in a few weeks?????? It’s still most likely worth $ 150,000. I did not kill the deal they killed it themselves………………….

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  3. Jeremy Hall Appraisals - CO Jeremy Hall Appraisals - CO says:

    Yes TD, & Fritz; It’s a price vs value argument there. And without ‘funny math’, concessions are clearly reduced net to seller which requires a dollar for dollar grid adjustment. On one hand, appraisers would be better off with direct MB contact. On the other hand, the MB’s clearly misused the manual assignment system in enough instances, that everyone is separated now. / If MB’s want to deal with appraisers directly again, they need to; A: Adopt a round robin distribution system to avoid the appearance of impropriety and prevent only the most liberal of appraisal valuators from receiving work orders & B: Digress in their ability to select appraisers, but rather the MB’s should return to sensible underwriter controlled appraiser fee panels. Either an appraiser is good enough to be on the lenders approved list and expect a fair share of work, or the appraiser is not good enough and should not be on that panel. The process of assigning work based on appealing results has many a MB spoiled, and I’d speculate those are some of the MB’s who’ve seen income decline. Other income declines relate to absurd company decisions to farm out appraisal distribution to amc’s who seek the lowest appraiser bidder, but do NOT pass those cost savings on to the consumer. What does not work for appraisal distribution: Preferential ‘lions share of orders’ assignment and this new system were non-qualified people assign appraisal orders. Did you know that an appraisal distributor can earn $60k a year, without even being qualified to know a dang thing about the appraisal process? Lenders are behaving like one hand is not talking to the other. They have been, and continue to be their own worst enemy when it comes to valuation security through sensible appraiser engagement. In the past 5 years or so, it’s been dang near impossible for me to sell my services to someone who actually understands the services I provide. People actually qualified to assess appraisers abilities usually cannot effect the appraisers standing or their workflow.

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  4. Jack Schlenk says:

    My appraisal reports with attachments are 40- 60 pages. Most of my comment will have two different location. Many, many years ago I was told “tell them twice and hope they read it once” Review the many articles on my blog.

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